In October, Russian President Vladimir Putin confirmed that the BRICS countries were discussing the use of digital currencies to reduce the impact of the West on fintech. Currently, the group is considering creating a digital asset platform designed to reduce international transactions of USD. President Putin expressed support for the initiative, which emphasized that digital currencies can benefit not only BRICS countries and other developing economies.
According to Putin, as reported in the Crypto Briefing, the BRICS countries plan to temporarily launch a service called BRICS wages. The platform will be used by member states including Brazil, Russia, India, China, South Africa, Iran, Egypt, Egypt and the United Arab Emirates.
The platform is built on a blockchain network and is expected to promote cross-border settlements in the above countries. Financial assets such as cryptocurrencies and CBDCs will not require brokers or intermediaries to implement transactions. Additionally, using digital assets for payments can reduce the service fees typically charged by Fiat currency transaction payment payers.
To support these payments in digital currencies, the BRICS countries also want to launch messaging systems like Swift – a secure platform for information sharing used by multiple financial institutions.
The BRICS Group has been trying to make payments since earlier this year. In March, Russian publication Tass reported that a potential decentralized platform had been proposed to the group to integrate digital assets into the existing financial systems of the relevant economies.
In recent years, the US dollar has faced significant fluctuations due to continuous interest rate hikes in the Covid-19 era. For China and Russia, the need to reduce dependence on the dollar is particularly urgent, as the United States imposes multiple sanctions on payments from these countries.
The 16th BRICS Summit was held in Kazan, Russia from October 22 to October 24. It is reported that browsing the system in this International Payment System, the issue of the dollar-led system being the number being dominated by the US dollar was one of the most important agendas during the conference.
It is worth noting that India is also working with the G20 countries to formulate a series of comprehensive global crypto regulations. However, the RBI and officials of the Indian Finance Ministry have not disclosed any details about the digital asset platform currently being discussed by the local organisation.
